March 14, 2013

Paul Ryan’s recently released budget will not become law—at least not any time soon. The Democratic Senate would never pass it, President Obama would never sign it. Ryan surely knows this, and his proposal is a fantasy budget: more an ideological argument than genuine attempt at legislating.

That hasn’t stopped widespread media coverage of Ryan’s proposal, and that’s fine: he’s a leading thinker of the conservative movement, with real power. But corresponding attention should also be paid to the opposite ideological vision sketched out by the Congressional Progressive Caucus in the “Back to Work” budget proposal, released on Wednesday.

As the name suggests, the CPC budget puts a priority on job creation—something no current proposal currently does. Ryan’s doesn’t even make an attempt at immediate job creation, but just posits that a decade from now, a smaller national debt will nudge Gross National Product Forward. The Senate Democratic budget has a relatively weak $100 billion infrastructure proposal tucked in amidst $960 billion in budget cuts; that’s nice, but clearly not a priority of their plan.

The “Back to Work” Budget contains a $544 billion increase over current spending on public investments and job creation in the first year, including $75 billion for an infrastructure program, $155 billion for a public works program and aid to distressed communities, $80 billion for hiring teachers and $92 billion for reinstating the Making Work Pay tax credit. It also expands unemployment insurance, sends more money to the states and undoes the sequester cuts.

The CPC estimates this will create $7 million jobs in the first year—and over the next ten years, the budget would spend over $4 trillion more on job creation and public investments.

But this massive spending is offset by a number of crucial revenue measures: The “Back to Work” budget increases taxes on millionaires and billionaires, taxes investments at the same level as wages, closes corporate tax loopholes, enacts both a financial transactions tax and a carbon tax, and introduces both a public option and government negotiating for drug prices to Medicare. In addition, the budget finds savings by cutting Pentagon spending back to 2006 levels.

In short, they sketch out the opposite vision of Paul Ryan: reduced military spending, robust public investment and a strong safety net.

Moreover, the budget actually reduces public debt over the next ten years compared to both current law and current policy, as this table from the Economic Policy Institute Policy Center Shows:

You can find the full EPI analysis of the budget here and the CPC executive summary of their budget here. It’s certainly a vision that merits broad public discussion. And since it’s the only budget with a sincere focus on getting people back to work, instead of obtuse debates about the long-term federal deficit, it ought to attract some real attention.

Although Barack Obama is ready to negotiate over Chained CPI, senate democrats haver tested him on the benefit-cutting measure, George Zornick writes.